ALL-TIME HIGH REVENUE AND PROFITABILITY

SECOND QUARTER, APRIL – JUNE 2021

• Net sales increased by 21.6%, or 24.0% FX adjusted, to MSEK 78.5 (64.6)
• Gross profit increased by 34.0%, or 37.0% FX adjusted, to MSEK 61.3 (45.7)
• EBIT increased to MSEK 11.7 (4.7)
• Earnings after tax was MSEK 10.7 (2.8)
• Earnings per share was, basic SEK 1.35 (0.35), diluted SEK 1.35 (0.35)

FIRST HALF YEAR, JANUARY – JUNE 2021

• Net sales increased by 12.0%, or 14.1% FX adjusted, to MSEK 150.1 (134.0)
• Gross profit increased by 17.5%, or 20.1% FX adjusted, to MSEK 115.1 (98.0)
• EBIT increased to 18.2 MSEK (4.4)
• Earnings after tax was 18.0 MSEK (3.2)
• Earnings per share was, basic SEK 2.28 (0.41), diluted SEK 2.28 (0.41)

IMPORTANT EVENTS

DURING THE PERIOD      

• Lars Pahlman appointed new MD for subsidiary Nepa in Sweden. Lars was interim MD during the autumn of 2020.

AFTER THE PERIOD ENDED

• We have continued to welcome new customers and have not lost any customers so far.

A WORD FROM OUR CEO

Demand remained strong during the quarter in most of our markets, both for recurring projects and projects on an ad hoc basis. We see a pent-up demand as the pandemic is starting to subside. The increased ad hoc revenue is mainly due to a comprehensive advisory assignment on pricing and packaging of a new streaming service being launched in Asia and Southeast Asia.  

An exceptional quarter

Sales rose by 21.6 percent in the quarter to SEK 78.5 million (64.6), which represents another all-time high for a single quarter. Gross profit strengthened 34.0 percent to SEK 61.3 million (45.7), also higher than ever before. The positive profitability trend continued with an operating profit (EBIT) of SEK 11.7 million, corresponding to an improvement in earnings of SEK 7.0 million compared to the second quarter of 2020. The EBIT margin in relation to gross profit strengthened to 19.1 percent (10.2) while profit after tax amounted to SEK 10.7 million (2.8). We have built up a solid financial position with SEK 79.2 million in cash. The quarter has been exceptional in several ways. The large ad hoc project represented approximately 8 percent of sales during the quarter. This kind of large project does not come in with regularity and is therefore difficult to predict. At the same time this is a testament to our growing international reach. In relation to this, we have been temporarily understaffed, which has resulted in a positive one-off effect on profitability. To maintain the quality in our deliveries long-term, while implement­ting decided strategy transitions, more human resources are required than we had during the quarter. I would like to take this opportunity to express my sincere gratitude for the exceptional efforts my colleagues made during the quarter and beyond.

Long-term roadmap

The transformation of the company in accordance with the strategy adopted by the Board of Directors earlier this year continues, although we have not come quite as far in the process as I had hoped. The reason is that during the quarter we had to allocate most of the available resources to extensive customer deliveries. The plan is unchanged and that is to finish our legacy clean-up and to increase the share of cutting-edge marketing initiatives. In the latter area, we have taken several important steps, which has resulted in interesting pilot projects with some of the world's most famous brands. In line with the strategy, we have also continued to increase recurring revenues, which during the quarter rose by almost 14 percent to SEK 48.2 million (42.4).

Prospects

It’s still vacation time in some of our markets, but so far, we see no signs that the market would not remain strong even in the current quarter. Finland is showing particularly strong development, while the trend in the UK, where Nepa historically has had a higher proportion of ad hoc projects, remains cautious. The UK has also been hit by new outbreaks of the pandemic during the summer, creating uncertainty. I am convinced that we will be able to recruit the right skills and meet our needs; Nepa has a strong brand in the labour market with an attractive corporate culture. All in all, this means that I remain optimistic about the opportunities to create continued growth and stable profitability long-term.
 

P-O Westerlund
CEO

For further information, please contact:

P-O Westerlund, CEO                      Michael Wallin, Head of IR
+46 706 404 824                              +46 708 788 019
p-o.westerlund@nepa.com             michael.wallin@nepa.com

This is a translation of the Swedish interim report. If there should be any discrepancies, the Swedish language version governs. The Swedish version is information that Nepa AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 CET on August 20, 2021.

Nepa, a leader in Brand Experience and Marketing Optimization, helps some of the world’s most reputable brands drive growth through data. This is achieved by combining first-class research, cutting-edge technology, deep expertise and innovative solutions. Headquartered in Stockholm, Sweden, with offices in Norway, Finland, Denmark, UK, USA and India, the company is listed on the Nasdaq stock exchange and has been publicly traded since 2016. Erik Penser Bank AB is Nepa’s Certified Adviser (phone: +46 8-463 83 00, e-mail: certifiedadviser@penser.se).